A Kuwaiti vendor holds British Pound banknotes at a money exchange shop in Kuwait City. / AFP / YASSER |
The pound built on the
previous day’s gains in Asia Friday after the Bank of England surprised markets
by holding fire on an interest rate cut at its first meeting since Britain
voted to leave the European Union.
Many had expected a move to
counter the fallout from the shock vote last month, and after Bank chief Mark
Carney hinted more easing was in store.
However, the central bank
signalled a possible August cut.
“The precise size and nature
of any stimulatory measures will be determined” next month, BoE policymakers
said.
In Tokyo, sterling rose to $1.3469
from $1.3344 in New York where it had jumped 1.5 percent immediately after the
Bank decision.
Speculation of more stimulus
from Japan’s government and central bank pushed the yen lower.
The greenback jumped to
106.22 yen from 105.44 yen in New York, returning to levels seen before the
British vote pushed the yen soaring as investors sought out safe assets.
“Anticipation of a massive
stimulus package continues to drive investor sentiment and the ensuing
divergence in monetary policy between the Federal Reserve and BoJ continues to
weigh on the yen,” said Stephen Innes, senior trader at OANDA Asia Pacific.
“However, major headwinds
emanating from the Brexit fallout, not to mention the US presidential election,
are more likely to turn investors guarded, despite Japan’s stimulus efforts. So
expect a bumpy road ahead.”
Sentiment also got a lift
from data showing China’s economy grew more than expected in April-June, which
fuelled hopes growth may be stabilising in the world’s number two economy.
The euro rose to 118.23 yen
from 117.22 yen and to $1.1135 from $1.1117 in US trade.
Credit:AFP
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